David Bloom, strategist at HSBC, penned a note arguing this view (with the appropriate headline, “USD: Heads I win, tails you lose”). The positive side of the coin is reasonably straightforward. Bloom reckons that if the data comes in strong, then the market could reassess the potential timing of a change in Federal Reserve policy.

“While strong US growth will take a long time to feed through to the rest of the world, liquidity reduction is immediate,” he says.

The flip side, he says, is a very weak number could see the market lurch into “risk off” mode — which also would probably result in a higher dollar.

The MarketWatch-compiled consensus economist forecast is for the Labor Department to report 160,000 nonfarm jobs were added in February.

More broadly, Bloom says the dollar’s gain since the end of January isn’t just a result of being the other side of negative euro, yen and sterling stories. “The economic news from the US has been largely positive and the market seems happy to hold it despite the continued fiscal problems,” he says. The dollar diffusion index, which measures the proportion of 31 currencies against which the dollar has risen or fallen, is close to its highs, he adds.

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